I am a recovering debt addict and I am always on the look out for resources that help me develop better habits. The author M.P. Dunleavey takes a I’m-one-of-you/we’re-in-this-together approach to personal finance, therefore I thought this book might be useful, but I was wrong.

In retrospect, where this book began to go wrong was in the title. The author claims she is going to guide you on “how to spend”. For example in chapter 6 called “Put Your Money Where Your Health Is”, you’d think this advice would be the most thoughtful, yet I found most of these tips empty, useless, wasteful, and out of touch. A couple are:

* “Sometimes it’s a better investment to spend out of pocket to see a doctor whom you like and trust and who spends time with you.”

*”It’s worth investing in a more deluxe gym…”

The suggestion about paying out of pocket to find a doctor you “like”, though well meaning, ignores the realities of the average American. The sad fact is that we have a national health care crisis and millions of Americans lack fundamental access to health care services, let alone the ability to “shop” around for a doctor. If you can afford paying out of pocket every time you visit your physician, good for you!

Also, I don’t know what “more deluxe gym” means, other than MORE EXPENSIVE. Unfortunately, this is how the whole book reads, less about making tough choices and more about justifying excess and waste as long as it’s “convenient” or makes you “happy”.

Even the so-called “60% solution” that is supposed to pave the way for you to start buying “happiness” is ill conceived. You need to divide your gross income (pretax) into 5 categories:

60% – Should only be used to cover “basic living costs”

10% – Retirement

10% – Long term savings

10% – Short term savings

10% – “fun, frivolous, spontaneous expenses” she says don’t even bother keeping track of this cause it’s suppose to be “guilt-free”

Using the author’s own figures and estimates this plan sounds like a disaster. Dunleavey says, that if you make about $48,000 a year (pretax of course) your basic living costs should be 60% of an average $4,000 a month, which would be $2,400. She also estimates that federal, state, and local taxes will be about 1/3 to 1/2 of $2,400.

Ultimately leaving you about $1,200 to $1,600 to provide for your basic living costs which she lists as:

Taxes (which I already covered)

Mortgage/rent (don’t forget property taxes, home owner’s insurance)

Health care costs (premiums, co-pays, prescriptions, don’t forget the out of pocket cost for a doctor you “like”)

Car payments

Car insurance

Gas

Home phone

Cell phone

Heat

Electricity

Water

Food

Tuition

Childcare

Charitable giving

Other (assuming you have any money left)

I believe by her own standards this is a pretty crappy system. She is advocating meeting your basic needs by living at about the federal poverty level for a household of 2 which is about $14,570 in 2009. An improbable feat for an individual, impossible challenge if you threw a spouse and a child into the mix. I really doubt that on such a plan anyone would feel “happiness” or “guilt-free” to have spent $4,800 (10% of 48k) unaccounted for “frivolous” money at the end of the year.

Obviously, I felt this book was awful before our current economic crisis and I certainly don’t think you should waste your money now. If you are like me you don’t have 20 bucks of “frivolous” money. This author is completely oblivious.

In conclusion, Dunleavey’s “buy happiness” theory lacks substance and is just another gimmick. I am a working mother and I strongly feel you don’t have to be an MBA or PhD to wrangle your personal finances. It is accurate to say that this author’s main audience is women and I frequently found this book too dumbed down on the subject of personal finance that it will leave you falling back on excuses and justifying excess instead of feeling empowered or challenged to do better.

Rating: 1 / 5